The Government Stole Your Money, LFG Daily - December 23, 2025

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Luke Lloyd, CEO Lloyd Financial Group

1971 Was the Real “Affordability Crisis”

Why Going Off the Gold Standard Changed Everything

Everyone loves to argue about when things got so expensive.

Was it COVID?Was it corporate greed?Was it millennials buying too much avocado toast?

No.

If you actually want to understand why housing, college, healthcare, and even stocks feel permanently out of reach, you have to rewind the tape to 1971—the year the U.S. quietly abandoned the gold standard.

That decision didn’t just change money.It changed incentives, behavior, and the definition of “affordable” itself.

Before 1971: Money Had a Speed Limit

Prior to 1971, the U.S. dollar was tethered—directly or indirectly—to gold. That mattered for one simple reason:

You couldn’t create unlimited money without consequences.

If the government wanted to spend more, it had to:

• Raise taxes (politically painful), or

• Borrow real savings at real interest rates (also painful)

  
  

There was a natural brake on debt, deficits, and excess.

Was the system perfect? Of course not.But it forced discipline—something modern governments are allergic to.

1971: The Moment the Guardrails Came Off

When President Nixon closed the gold window in August of 1971, the dollar officially became fiat money—backed by nothing but confidence and government decree.

From that moment on:

• Money could be created digitally

• Debt could be rolled endlessly

• Interest rates could be manipulated

• Pain could be delayed… indefinitely

  
  

And once politicians learned they could spend today and let future generations pay the bill, there was no going back.

The Borrowing Explosion

Since 1971, U.S. government debt has gone from roughly $400 billion to over $34 trillion.

That didn’t happen because Americans suddenly got more irresponsible.It happened because the cost of borrowing was artificially suppressed.

When money is cheap:

• Governments borrow more

• Corporations lever up

• Speculation replaces savings

• Asset prices inflate faster than wages

  
  

This isn’t capitalism running wild.This is price signals being distorted by policy.

Asset Inflation Is the Real Tax

Here’s the part most people miss.

Money printing doesn’t hit everyone evenly.

It flows first into:

• Stocks

• Real estate

• Private equity

• Venture capital

• Financial assets

• 
  

So what happens?

If you already own assets → you get richer.If you rely on wages → you fall behind.

That’s how you end up with:

• Homes costing 7–10x income instead of 2–3x

• Stock markets detached from productivity

• College tuition exploding faster than inflation

• A permanent renter class

  
  

This isn’t a failure of markets.It’s a feature of monetary intervention.

The Great Illusion: “Free Markets Did This”

Whenever affordability comes up, free-market capitalism gets blamed.

But real free markets require:

• Honest money

• Accurate price discovery

• Risk having consequences

• Failure being allowed

  
  

What we have instead is:

• Central bank intervention

• Bailouts

• Zero-interest rate policies

• Moral hazard everywhere

  
  

That’s not capitalism.That’s state-managed finance with capitalist branding.

Why This Matters for Financial Planning

You can’t build a real financial plan if you don’t understand the system you’re operating in.

Post-1971 realities mean:

• Cash loses purchasing power over time

• Assets become necessities, not luxuries

• Debt benefits institutions more than individuals

• Savers are quietly punished

  
  

This is why long-term planning today looks nothing like it did for previous generations.

And it’s why simply “working hard and saving” no longer guarantees financial security.

The Bottom Line

The affordability crisis didn’t start in 2020.It didn’t start with corporations.And it didn’t start with capitalism.

It started when we removed the limits on money, debt, and government power.

1971 was the inflection point.

Once money stopped being scarce, everything else did too—except wages.

Understanding that isn’t political.It’s financial reality.

And if you’re planning for the future, ignoring it is the most expensive mistake you can make.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

Barring a surprise, all the significant events of the year should be over. Can we just relax and drink our eggnog? Probably, but I’m paid to worry about what could go wrong. What’s a bit of a list of worries?

One concern remains liquidity. In particular, there seems to be a bit of a gap in the expansion of the Federal Reserve balance sheet, with a funding happening this morning, then the expansion restarting on January 6th, as normal. With end of year liquidity demands in there, can that cause trouble? We’re on our own for the rest of the year.

I’d like to think there’s enough liquidity provision, but nobody really knows. I can say that rates, whether credit spreads or SOFR, has been trending better. There’s currently less stress than there used to be and there’s room for that to continue improving. I’d also say that following this little gap in funding, we’ll be right back to expanding the Fed balance sheet, so any dip caused by a liquidity gap should likely be bought.

Another concern is the ongoing trouble in Japan. The new Prime Minister wants to spend but inflation is sticky. To fight that inflation, they’ve been raising rates. The yen is a major funding currency, so yen volatility has the potential to cause selling in US markets as the carry trade becomes less attractive. The BOJ raising rates to fight inflation likely ranks as the biggest brake on liquidity.

Japan is definitely a reasonable concern, but it’s also something the BOJ is keenly aware of and has dealt with before. The way carry trades work, we can have problems crop up quickly. Thus far, though, we haven’t seen any real sign of stress. If the yen were strengthening while SPX was weakening (the line below would be going down,) that would be a potential worry, but that trend isn’t here.

A third concern is the potential for economic weakness. We’ve seen a job market slow down for quite a while and retail strength is looking a bit weaker. If we started to get some negative trends in either series, that could be cause for worry. However, that broad worry has been around for a while, and with the rebuilding from the government shutdown, it’s possible we don’t see trouble for quite a while.

In all these cases, while they are concerns, there’s no sign of imminent trouble. Honestly, I think upside is more likely that downside, here. Liquidity is coming back, and many investors are underinvested. There are no guarantees, given markets are expensive and liquidity is already fairly high, but this is a reasonable setup for further upside. People may be surprised how quickly we can see further upside as investors feel forced to chase.

Verbal intervention saw the yen go modestly higher and supporting global bonds.

A weak 2Y T auction helped hit bonds, yesterday.

Novo Nordisk (NVO) had the first oral weight loss pill approved, sending shares up 7%.

Predictably, volume dropped considerably yesterday, something we should get used to for the rest of the year. The VIX volatility index is down to 14, hitting the lows of the year. All is calm.

Looks like we should get PCE data for real, today, in addition to Q3 GDP, Industrial Production, and Durable Goods.

What does it all mean? Holiday trading seems in full effect, though we get a lot of econ data this morning.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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